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Self Help: Frequently Asked Questions

1. What is mutual self-help housing?
Mutual Self-Help Housing is a federal program to assist low-moderate income families to own their own home. Participants agree to help each other build their homes and form building cooperatives. Homeowners build “sweat equity” by contributing 65% of the construction labor. This saves an estimated $20,000 on the cost of similar housing – making homes more affordable, lowering monthly payments and eliminating down payments.

2. What is Community Action Self-Help Housing?
A non-profit corporation established in 1965 and funded by the US Department of Agriculture Rural Development, CAC assists income eligible participants who have good credit to get low interest loans. We provide technical assistance by organizing groups of households into building groups, finding suitable building lots, providing building expertise and teaching the skills necessary to complete each house in the group. We also order materials, assist in securing contractors and manage the loans and bill paying during construction.

3. What kind of house can I expect?
Homes are modest in size, design and cost. Homes are one story, wood frame with gas or electric heat, central air conditioning and an attached 2 car garage. Homes are built using energy star techniques which results in Energy Efficiency. The size of your home varies from the different house plans we have available, your house plans are available through Standard Home Plan Services, Inc. Three and four bedroom plans are available. The living area will generally not exceed 1,420 square feet. Limited choices of siding, roofing, floor covering, vanity tops, counter tops and some paint colors are available.

4. Is the program for families and married couples only?
The Mutual Self-Help Housing Program is for everyone that qualifies regardless of ethnicity, race, religion, or marital status.

5. May I pick my house plan?
There are a number of house plans available, each of which you may view in our office. We try to accommodate the plan you select, but we must consider what you can afford, the lot size and the size of your household.

6. What is “Sweat Equity”?
Households provide 65% of the labor to build their home. Each household commits to working in their group for the entire building process which could be from 6-9 months. Licensed contractors put in the electrical, plumbing, HVAC, drywall, excavating and concrete.

7. What is the interest rate on the mortgage?
The interest rate varies. Interest rates are usually subsidized. When a home is sold a portion of the subsidy may have to be repaid, depending on how long the home was owned and the circumstances.

8. How much will my house payment be?
That is a tough question to answer here, because your interest rate (somewhere between 1% and the current note rate) is based on your income. In fact, as your income changes so may your interest rate, but never less than 1% and never more than the maximum rate at the time of your loan closing. We cannot even venture to guess at a number because there are so many variables, but we can say that we have helped over 250 families and individuals, afford brand new homes! We can give you a pretty good estimate of your monthly payment when we know your individual circumstances.

9. Can I qualify for a loan if I’ve had credit problems?
That depends on the type of problems, the circumstances involved and the current situation. This program was created to help low-moderate income families and individuals with good credit. You’re welcome to contact us to see if you qualify now or how you could improve your situation to qualify later.

10. How much cash out of pocket will I need?
Plan to have about $550 saved to pay for your application fee, and for the first year of your homeowners insurance. You will also need some basic hand tools to help build your home.

11. May I sell my home?
YES. You may sell your home at any time after occupancy. You may be required to pay back a portion of your subsidy.

12. Is there a long waiting list?
NO. Eligible applicants are put into groups according to the eligible area they want to live in and the date of the original application. Groups may have to wait for property to be developed but other than that there is no waiting list at this time. Groups begin construction once property is ready, loans are closed, and there are 4-6 households in each group.

13. How long does the application process take?
Once your application is submitted the wait is determined by USDA and if or when they have money available. You may wait a couple of weeks or months until a group of five-eight households have closed their loans and are ready to start building.

14. May I pick the location of my house?
CAC Self-Help Housing locates property where building sites are developed and groups of four to six households may build their homes adjacent to each other when possible. Adjacent building lots helps to keep construction costs at a minimum which helps keep your payments affordable.

15. How long will it take to build my house and how much time will I be required to commit each week?
Generally you should anticipate 6-9 months construction time depending on the weather. Each week every Building Group Member household will be responsible for approximately 30 hours of productive labor. You can use volunteers to help with some of those hours.

16. Do I need construction experience?
No construction experience is needed. Everyone receives construction training before and during the construction process. You’ll learn everything from how to read blueprints, how to use construction tools and equipment and how to complete every construction task you’re asked to do.

17. Do I need my own tools?
You’ll receive a list of tools which you will need. At that time you can purchase those that you don’t already own. Some tools will be provided.

18. Will I be required to attend a homebuyer education course?
YES. Most lenders including USDA, require that all borrowers complete a homebuyer education class. This class will educate you on the entire buying process and give you information on the language that is often used so you won’t be confused. You will also learn about predatory lending in an effort to protect you in the future from sub prime lending practices.

19. Once I move in will I be forgotten about?
Of course not! The CAC Self-Help Housing Program Staff is always here to assist you now and in the future, especially if you have any type of financial difficulty or if you are having difficulty making your mortgage payment. Funds are limited and may not always be available so we may refer you to other programs.

20. Will my home come with appliances?
You will have a dishwasher, build in mocrowave, stove and refrigerator. Your home will come with the garage door opener and a washer and dryer hookup, but not the washer and dryer itself.

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